Flexible Warehousing Market and the Pandemic Consequences – Part – II

In the past couple of years, COVID petrified everybody all around the world. Not just the people, the pandemic affected the very way of conducting and operating distribution and warehousing, respectively. COVID has made a significant impact on both warehousing and distribution as well as on industry processes. Especially, warehousing has an impeccable record of being challenging when dealing with significant seasonal variations. This becomes even more challenging when we take unpredictable weather and customer demand into account. The warehouse has always been a non-comfort zone for the workforce, but during a COVID outbreak, the situation got even worse. 

In the first part, we discussed COVID-19’s consequences on warehousing and how the warehousing market in the world became flexible to sustain the epidemic. In the second part, we’ll continue exploring more consequences of the pandemic on the warehousing world and the strategies adopted to cope with the situation.

Key-takeaways

  • Flexible warehousing market after COVID
  • Consequences of pandemic
  • The competition between eCommerce and In-store shopping
  • Why are bigger warehouses needed post-pandemic?
  • Why are stores converting into distribution centres?
  • Increasing demand for cold chain management 
  • Conclusion 

Consequence#5: eCommerce Vs In-store

Although eCommerce was already in play before the COVID pandemic, however, the epidemic unquestionably spiked eCommerce in demand. Whatever experts were expecting to happen in 2022, we already saw in 2020 in the eCommerce world resulting in over four trillion dollars in worldwide e-commerce sales in just one year. Even warehouses and distribution facilities were not ready to keep up with the demand growth.

When the customers are returning to stores again for shopping, the experts are predicting that even if the traces of COVID are gone from every part of the world, eCommerce is not going to stop and will continue to set records in the coming years. According to a recent survey, people claimed that they find online shopping convenient, and they’ll keep continuing this mode of buying things. However, the same people also mentioned that they would still like to do in-store shopping as well for some items just to remain in touch with the conventional style of buying goods.

Consequences#6: The Bigger the better!

The warehouses in the US and in many parts of the world that were seriously affected by the virus outbreak, immediately down the road saw orders dry up and were left with an oversupply of inventory, while some warehouses were overloaded with orders and had labour and inventory constraints. Most warehouses find it extremely difficult to manage the wild changes in order demand.

Warehouses started to look to create scalable systems to handle erratic demand in the wake of COVID. Warehouses implemented adaptable order picking procedures to readily accommodate demand peaks and valleys using a combination of material handling technology and software solutions like SWIM which is a highly integrated and advanced warehouse management system installed at AWL India. Warehouses will want picking systems and procedures that can modify automation levels or personnel requirements to boost or decrease picking speeds overnight.

Consequences#7: A store into a distribution centre – A New Avatar

Omnichannel distribution is here to stay. The warehouse needs to manage a variety of delivery choices as it transitions from picking whole cases for retail outlets to picking individual goods for end users. With omnichannel, a customer can purchase any location whether online or at a store, and the product will be delivered wherever they choose with a wide choice of delivery options. Even reverse logistics nowadays offers plenty of choices. For successful omnichannel distribution, warehouse and distribution facilities are now looking for cutting-edge technology, processes, tools, and manpower management.

Brands have already started using their current brick-and-mortar stores as mini-distribution centres only as customers want faster delivery of their purchases. Brands are expanding their distribution network without putting a burden of large investments on themselves. Adding distribution capabilities to already-existing retail shop locations than working with a 3PL or building more warehouses may seem to be less expensive but in the long run, logistics pundits don’t recommend this. Hiring a 3PL or 4PL logistics company like AWL India and others is always recommended as it saves a lot of finances on warehouse operations, manpower and incorporating technology.

Consequences#8:  The cold storage is going hot!

Certain industries grew quicker than others because of the impact of the epidemic. The grocery or FMCG industry is such an example of the quickest growth. When COVID originally hit the roads, customers competed online for supermarket pickup times. However, it was already anticipated that the situation will get back to normal once the epidemic starts dissolving. Many customers chose online pickup over in-store visits in the early COVID phase but now going back into the stores, their most lovable and traditional way of doing shopping.

However, if talking about cold chain management, the demand for cold warehousing is growing tremendously after the dip in the virus outreach as people have liked the concept of ordering grocery and cold-storage items online, not because they fear shopping out but because of the convenience or receiving daily perishable food items at their doorstep. On top, there is no need to negotiate with the local vendors, and great deals are available online due to tremendous competition and good quality grocery items provided by the eCommerce companies rising online grocery demand. A warehouse usually incurs high fees for cold storage because of high-cost storage equipment, so, to manage smaller, more effective temperature-controlled storage facilities, warehouses are attempting to fully automate their facilities. Resulting in increasing demand for cold-storage management.

CONCLUSION

The covid19 epidemic undoubtedly had an impact on global supply chains. The coronavirus’s effects were felt widely, affecting everything from delivery costs to human capital. The logistics and supply chain challenges were extremely disruptive because the world is still in the early stages of the digital transformation of supply chains and distribution networks, particularly because some distribution centres and warehouses have been slow to adopt technologies and still largely operate manually.

In addition to necessities like food, medicine, personal protective equipment, and hand sanitiser, consumers must be able to rely on supply chains for the everyday commodities that provide them comfort, satisfaction, and even joy.

From a positive point of view, the coronavirus may have had a good effect by demonstrating that complicated issues can sometimes be resolved via close cooperation, creative problem-solving, and the adoption of fresh approaches and ground-breaking new technology. Supply chains, warehouses, and distribution facilities can be made more resilient, defendable against cybersecurity assaults, and efficient with developing technology, including artificial intelligence, mobile robots, material handling equipment, and sophisticated management systems. When workers must be absent due to illness, ASRS, material handling devices, and mobile robots can make up for the loss of human capital, potentially saving lives.

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